COURT FILE NO.: CV-19-00620590-0000
DATE: 20220608
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Country Wide Homes Upper Thornhill Estates Inc.
Plaintiff
– and –
Qi Cui
Defendant
AND
Qi Cui
Plaintiff by Counterclaim
– and –
Country Wide Homes Upper Thornhill Estates Inc., Your Advocates Reality Inc., Riccardo Del Rosso, David Crudele, Homelife New World Realty Inc., Jie Chen, John Doe and Jane Doe
Defendants by Counterclaim
Emilio Bisceglia and Sonja Turajlick, for the Plaintiff/Moving Party, Country Wide Homes Upper Thornhill Estates Inc.
Qi Cui, self-represented Defendant and Plaintiff by Counterclaim/Responding Party (with an interpreter)
HEARD BY VIDEOCONFERENCE: November 8, 2021
vella j.
REASONS FOR JUDGMENT
[1] The plaintiff, defendant by counterclaim, Country Wide Homes Upper Thornhill Estates Inc. (“Country Wide”) seeks summary judgment against the defendant/plaintiff by counterclaim, Qi Cui (“Cui”) on its action in the sum of $906,474.00 plus prejudgment interest at the rate of 2% per annum from February 17, 2021 and costs, and dismissal of the counterclaim as against it and its real estate brokers, Your Advocates Reality Inc., Riccardo Del Rosso, and David Crudele (collectively “Country Wide’s Brokers”).
[2] In brief, the action concerns a failed real estate transaction. Cui entered into an agreement of purchase and sale with Country Wide dated March 9, 2017 (“APS”) for a high-end pre-construction residential property for the sum of $3,964,990. When Cui failed to close the transaction under the APS, Country Wide re-sold the property for $3,250,000 plus HST. In addition, Country Wide incurred real estate commission fees and carrying costs.
[3] The counterclaim as against Country Wide, Your Advocates Reality Inc., Riccardo Del Rosso, and David Crudele. is for a declaration that the APS was null and void and seeking a return of Cui’s deposit in the sum of $334,100 plus interest.
[4] On November 2, 2021, Cui moved, on an urgent basis, for an adjournment of this motion. For reasons released on November 2, 2021, Myers J. denied the motion.
[5] Cui renewed her request for an adjournment before me. Cui did not appeal Myers J.’s ruling. In addition, she did not offer any new reasons in support of her request for an adjournment before me. Accordingly, I denied the request for an adjournment.
[6] I am satisfied on the evidentiary record that this is an appropriate matter for summary judgment. I am further satisfied that this is an appropriate matter for partial summary judgment with respect to the counterclaim against Country Wide and Country Wide’s Brokers.
[7] For the reasons that follow, Country Wide’s motion for summary judgment is granted with respect to its action, and partial summary judgment is granted with respect to the counterclaim against Country Wide, and the claims against Country Wide’s Brokers.
Summary Judgment Test
[8] Rule 20 provides that the court shall grant summary judgment where it is established on the evidentiary record that there is no genuine issue requiring a trial.
[9] The Supreme Court of Canada, in Hyrniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, stated that the summary judgment process is to be interpreted broadly, and will be appropriate where it will provide a proportionate and fair adjudication of claims in an affordable, timely and just manner.
[10] The court on a motion for summary judgment should undertake the following analysis:
(1) assume that the parties have placed before it, in some form, all of the evidence that will be available for trial; and
(2) on the basis of this evidentiary record, the court must decide whether it can make the necessary finding of facts, apply the law to the facts, and thus achieve a fair and just adjudication of the case on the merits (Hyrniak at paras. 49, 66)
[11] In addition, while the evidentiary burden is on the moving party, the responding party may not rest on her allegations or denials in her statement of defence. She must put forward facts, by way of evidence, showing that there is a genuine issue that requires a trial (Srebot Farms Ltd. v. Wolfert, 2011 ONSC 7661, at para. 8).
[12] For the reasons that follow, I find that this is an appropriate case for summary judgment without the need to resort to the fact-finding powers under r. 20.04. Furthermore, there is no genuine issue requiring a trial, and the motion for summary judgment is granted.
Findings with respect to the Main Action
[13] Country Wide relied on the affidavits of its vice president Sam Balsamo. In addition each of David Crudele and Richard Del Rosso filed affidavits on their own behalf and on behalf of Your Advocates Realty Inc.
[14] Cui filed her own affidavit.
[15] Cross examinations were conducted of all of the deponents. At the time of the filing of affidavits and conduct of cross examinations, Cui was represented by a lawyer.
[16] It is clear on the evidence that at all material times, Cui was represented by her real estate agent, the defendant, Jie Chen (“Chen”), including at the time the APS was signed on Cui’s behalf. Chen, in turn, is affiliated with the Defendant by Counterclaim, Homelife New World Realty Inc. (“Homelife”).
[17] The APS stipulated that Cui (who was out of the country at the time) agreed to purchase a home to be built by Country Wide known municipally as 116 Lady Jessica Drive in Vaughan, Ontario (Lot 045T) in the property development known as Upper Thornhill Estates Inc., also referred to as The Enclave (the “Property”). There is no dispute that Cui was bound as the purchaser under the APS.
[18] In addition, there has been similar litigation brought by Country Wide Homes to either enforce other agreements of purchase and sale or for damages arising from breach of such agreements, including Country Wide Homes v. Zhou and Cui, 2021 ONSC 4724. These cases involve properties in the same development as the subject Property. In the latter case, Morgan, J. cited the Ontario Court of Appeal’s decision in Country Wide Homes Upper Thornhill Estates Inc. v Ge, 2020 ONCA 400, 24 R.P.R. (6th) 41 and noted that almost identical arguments were made by those defendants in their defence and counterclaim as were being made before His Honour. The Court of Appeal dismissed the defendants’ arguments and affirmed summary judgment in favour of Country Wide. Justice Morgan. followed suit in the motion for summary judgment arising out of another failed Agreement of Purchase and Sale before him. These decisions were drawn specifically to Cui’s attention by Country Wide.
[19] Like those cases, Cui’s defence in support of justifying the non-completion of the transaction was that the Property was subject to restrictions on its use and environmental contamination issues that were not disclosed, and materially affect the marketability and use of the Property.
[20] While the matter before me involves a different defendants, the ratios of the above cited cases are in relation to very similar arguments which I heard from Country Wide and Cui, concerning alleged environmental contamination and related misrepresentations.
[21] Cui is not a novice purchaser of real estate in Ontario. Indeed, between Cui and her spouse, they have purchased a total of 8 properties prior to March 2017 (the date of the APS), including one other pre-construction property from Country Wide.
[22] With respect to the misrepresentations relating to the alleged environmentally contaminated status of the Property, Cui also admits that all of the discussions regarding the Property leading up to the APS were held between her broker, Chen (an employee of the defendant Homelife New World Realty Inc., or “Homelife”) and Country Wide’s Brokers. Furthermore, the allegations regarding misrepresentations are found in Cui’s statement of defence and counterclaim as made against Chen are factually distinct from the misrepresentations and other allegations of wrongdoing alleged against Country Wide and Country Wide’s Brokers. Neither Chen nor Homelife have filed affidavits in this motion.
[23] Cui admitted on cross examination that she was aware and approved of a scheme whereby Chen would bring someone with him to pose as Cui to Country Wide on March 8, 2017 – the date the APS was signed. Cui left her identification to be used for this purpose. In any event, as stated, Cui does not deny that she authorized the entering into of the APS on behalf of herself. Cui has not identified who this this person was (referred to in these Reasons as the “Proxy”).
[24] It is noteworthy that Cui knew that another person would be standing in for her in signing the APS. However, that person held herself out to be Cui and had Cui’s identification. Apparently, the Proxy looked like Cui so Country Wide, and Crudele in particular, did not know that he was dealing with someone other than Cui.
[25] There is no doubt on the evidence that Country Wide’s Brokers (and in particular, Crudele) reviewed the APS on a page-by-page basis with Chen and Cui’s Proxy, that this Proxy initialed each page to confirm she had reviewed it, and then signed it. Also, Cui admitted that she believed the APS was firm and unconditional and had no problem with that. She also testified that Chen sent her pictures of the some of the APS pages at the time it was signed and that whatever he sent her she read.
[26] Of importance, each page of the APS contained, in large capital letters, the following phrase:
ORAL REPRESENATIONS DO NOT FORM PART NOR CAN THEY AMEND THIS AGREEMENT
[27] Accordingly, on March 8, 2017, Cui, as purchaser, made an offer in writing to Country Wide to purchase the Property with a house to be built on it that was to be customized as per her requirements, and Country Wide accepted that Offer on March 10, 2017. Country Wide also agreed to pay Chen the sum of $20,000 for his referral of Cui to Country Wide pursuant to an Agreement to Co-Operate signed on March 8, 2017. Cui personally picked out the upgrades she wanted.
[28] Cui places great reliance on the provisions of the Certificate of Property Use (“CPU”) in support of her arguments. However, the provisions of the CPU do not advance her claim that the Property is contaminated as demonstrated by land restrictions in the CPU (largely having to do with the property owner not being permitted to use the groundwater below the Property as potable water).
[29] The CPU was included in every agreement of purchase and sale relating to a property in The Enclave. It relates to a fishery that was historically located on the land referred to as The Enclave. It addressed the effects of that fishery on the water in the river and more specifically what was done to address those effects. Importantly, the CPU deals with the effects to the water, and not the land. However, Cui does not accept this interpretation of the CPU. Rather, she claims that the Property is affected and contaminated, and the existence of the CPU places restrictions on the use of that land which adversely effects its marketability.
[30] The evidence does not support Cui’s contention.
[31] Cui states that she would like to obtain more evidence and retain lawyers with environmental expertise. However, when she asked for an adjournment at Civil Practice Court, she was denied her request for a postponement of the hearing date. Furthermore, in her affidavit, and attached as exhibits, are documents that show that she consulted with an environmental law firm (Willms & Shier) and two environmental engineering companies (Dillon Consulting Limited or “Dillon”, and BlueFrog Environmental Consulting Inc. or “BlueFrog”). BlueFrog’s letter to Cui’s former lawyer confirms that it was retained to, in part, review the issue of the environmental soil and groundwater contamination in relation to the Property and to meet with Cui’s lawyer concerning its conclusions. No evidence of any of BlueFrog’s conclusions was produced. No affidavit from Dillon or BlueFrog was presented by Cui.
[32] In any event, Cui has had ample opportunity to obtain and produce expert and other evidence in for this action which was started in 2019. It is reasonable to infer (from the fact that she produced no evidence from either Dillon or BlueFrog) that she did not, because she could not find any expert who was able to support her position. As stated in Landrie v. Congregation of the Most Holy Redeemer, 2014 ONSC 4008, 120 O.R. (3d) 768 (Gen. Div.), at para. 47 and Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 1996 CanLII 7979 (ON SC), 28 O.R. (3d) 423, at para. 24, the responding party to a motion for summary judgment must put her best foot forward and cannot rely on a plea that more evidence will be procured down the road.
[33] In addition, according to Crudele’s evidence, he advised Chen and the Proxy of the fact that the CPU was registered on certain lots in Phase 2 of the Enclave (including where the Property is located), that there were restrictions on the use of the groundwater underneath the lots for potable purposes, and that engineered liners/vapour barriers were to be installed underneath certain dwellings including the Property before the APS was signed. There is no evidence that disputes Country Wide’s evidence, notably from the supplementary affidavit of Sam Balsamo (Vice President of Country Wide) that the vapour barriers were installed or that Crudele did not advise Chen and the Proxy of the CPU.
[34] Furthermore, in the APS, Cui was provided with five business days (to March 15, 2017) to obtain legal advice pertaining to the CPU and its effect on the Property (a “Solicitor’s Review condition”). This too was drawn to the attention of Chen and Cui’s Proxy. On March 15, 2017, Cui’s Proxy signed a Notice of Fulfilment acknowledging that the Solicitor’s Review condition was fulfilled.
[35] Country Wide completed the house and attempted to schedule Pre-Delivery Inspection meeting with Cui to sign off on the build. However, Cui did not respond to any of Country Wide’s communications.
[36] On February 25, 2019, Cui, through her lawyer, wrote to Country Wide’s lawyer and advised that Cui did not intend to close the transaction, raising the allegations that are the subject of her statement of defence, and waived the need to tender. Country Wide’s lawyer wrote that Country Wide remained ready willing and able to close on March 29, 2019.
[37] Cui failed to close the transaction on the date of closing.
[38] As a result, Country Wide had the Property re-listed and sold it at a lower price than that agreed to by Cui.
[39] At the end of the day, Cui has failed to rebut Country Wide’s evidence (including that of Del Rosso and Crudele) to the effect that
(i) Cui entered into an APS and was apprised, through her broker, Chen, and Proxy, that the Property had a CPU and that remedial steps would be taken to ameliorate any issues with respect to the ground water;
(ii) Cui, through Chen and her Proxy had five days from the signing of the APS to have a solicitor review the CPU and APS but neglected to do so;
(iii) Cui did not raise any concerns or complaints with respect to the CPU or any potable ground water issue until after the closing date for this real estate transaction;
(iv) Cui was not a novice real estate purchaser and she and/or her husband had already bought numerous residential properties including one from Country Wide before she entered into the APS;
(v) There are no environmental contamination issues with respect to the land comprising the Property, and the requisite vapour barrier/liner was constructed under the subject residential house;
(vi) There was a clause at the top of each page of the APS signed by Cui’s Proxy on her behalf that warned that there were no oral representations that could amend the APS;
(vii) Cui failed to close the transaction in accordance with the terms of the APS on the closing date;
(viii) Country Wide has incurred damages as a result of the APS.
[40] Accordingly, there is no genuine issue requiring a trial with respect to the merits of the action. Country Wide is entitled to a summary judgment for damages arising out of the breached APS against Cui.
Damages
[41] It is undisputed that Cui agreed to pay a purchase price of $3,964,9900 plus upgrades.
[42] Cui selected upgrades in order to customize the Property totalling $135,268.51 towards which she paid a further deposit of $34,100.00. This increased the price of the Property to $4,100.258.51.
[43] Cui paid deposits in the total sum of $300,000 between March 8 and August 8, 2017.
[44] The total amount payable on closing was $3,766,158.51.
[45] The closing date was extended, by Country Wide (as permitted by the provisions of Tarion Freehold Form (Tentative Closing Date) which was attached to and formed part of the APS) to March 29, 2019.
[46] According to the affidavit of Balsamo, Country Wide re-sold the Property on December 8, 2020 for the purchase price of $3,250,000 which was $850,258.00 less than the purchase price agreed to by Cui under the APS. The successor agreement of purchase and sale was produced as an exhibit.
[47] Balsamo listed Country Wide’s damages as follows:
Original purchase price with Cui:
3,964,990.00
Upgrades and extras:
135,268.00
Purchase Price
4,100,258.00
New Purchase Price
3,250,000.00
Difference from original purchase price
850,258.00
Less Deposits received including on the Extras
(334,100.00)
Loss on the resale of the Property
515,158.00
Plus Carry costs as follows:
Funds receivable on closing net of HST:
3,766,158.00
Add: Carrying Costs from March 29, 2019 to February 17, 2021:
Interest @ Prime + ¾%
2019
278 (days) at 4.7%:
134,818.14
2020
64 days at 4.7%
30,952.47
2020
12 days at 4.2%
5,186.18
2020
13 days at 3.7%
4,949.51
2020
277 days at 3.2%
91,211.00
2021
48 days at (figure not provided)
15,848.82
Total interest:
282,966.12
Broker Commission:
72,500.00
Property Taxes:
6,800.00
Utilities
5,000.00
Cleaning
2,000.00
Humidifier
1,300.00
Insurance
4,500.00
Lawn Maintenance
4,500.00
House (paint, floors, etc.)
10,000.00
DTG Inc. Staging Co.
750.00
107,350.00
Total Carrying Costs
390,316.12
Total Damages (no HST)
906,474.00
[48] The burden is on Country Wide to prove its damages flowing from the breach of the APS by Cui. Country Wide has tendered exhibits to demonstrate the original purchase price, the upgrades and the resale purchase price. However, it has not tendered exhibits demonstrating the interest rate it seeks by way of carrying costs, or the carry costs themselves.
[49] As noted by Morgan J., in Country Wide Homes v. Cui, the affidavit evidence filed is “some evidence” of the carrying costs. However, as Morgan J. noted, there was no explanation in Balsamo’s affidavit filed in the matter before him as to the choice of interest rate chosen. His Honour, in rejecting this interest charge, stated, at para. 26:
In addition to the above [carrying costs], the Plaintiff has added as a carrying cost the cost of interest calculated at Prime +1%. The total interest charge comes to $282,251.20. Mr. Balsamo deposes that this is how interest is to be calculated, but he gives no explanation for it. I do not know if that is the rate the Plaintiff was actually paying on borrowed funds during the relevant time, or if it is the rate that the Plaintiff would have expected to earn had the Defendants closed the transaction in a timely fashion.
[50] Surprisingly, Mr. Balsamo did not address Morgan J.’s concerns in his affidavit evidence before me. I agree with Morgan J.’s approach. Based on the evidence before me, which was not rebutted by Cui, I will allow all of the carrying costs with the exception of the interest charged in the sum of $282,966.12. I am satisfied that the other carrying costs are fair and reasonable, and in accordance with the list provided by Balsamo’s affidavit.
[51] Accordingly, Country Wide is entitled to judgment in the sum of $623,507.88 plus prejudgment interest in accordance with the Courts of Justice Act.
Test for Partial Summary Judgment
[52] Country Wide also seeks summary judgment dismissal of the counterclaim as against it and its Brokers.
[53] The test for partial summary judgment is stated by the Court of Appeal in Malik v. Attia, 2020 ONCA 787, 29 R.P.R. (6th) 215, at para. 62:
When faced with a request to hear a motion for partial summary judgment, a motion judge should make three simple requests of counsel or the parties:
(i) Demonstrate that dividing the determination of this case into several parts will prove cheaper for the parties;
(ii) Show how partial summary judgment will get the parties’ case in and out of the court system more quickly;
(iii) Establish how partial summary judgment will not result in inconsistent findings by the multiple judges who will touch the divided case.
[54] For the reasons stated above, there is no genuine issue requiring a trial with respect to the counterclaim by Cui against Country Wide and its Brokers as there is no credible evidence by Cui supporting her claim that the Property was environmentally contaminated justifying her claim that the APS was void ab initio or voidable by reason of Country Wide’s alleged failure to advise or disclose that the Property was formerly contaminated land and that restrictions exist with respect to the use and marketability of the Property.
[55] The counterclaim against Country Wide and its Brokers includes a claim based in misrepresentation with respect to the alleged contaminated nature of the Property. However the claim as against Chen and Homelife is based on a different factual matrix; it is based on an allegation that Chen represented that he could “satisfactorily complete the March 8, 2017 transaction on behalf of Cui’s behalf and Cui relied on this representation believing that Chen would act in accordance with his professional responsibilities as a licensed real estate agent and fiduciary.”
[56] In addition, there are no other counterclaims or cross claims against Country Wide or cross claims against Country Wide’s Brokers.
[57] As such, partial summary judgment in favour of Country Wide and Country Wide’s Brokers will not result in inconsistent findings.
[58] Furthermore, partial summary judgment will result in the complete removal from the proceeding of Country Wide and Country Wide’s Brokers. This matter has not yet proceeded to examinations for discovery. Accordingly, dividing the determination of this case will prove cheaper for the parties. Not only with the examinations for discovery be shorted, but so will the trial. For similar reasons, this matter will proceed through the court system more quickly.
[59] It is also noteworthy that Cui has commenced an action against Chen and Homelife relating to alleged negligence and misrepresentation in relation to the purchase of three other properties, by statement of claim issued as court file no. CV-19-00613914 raising similar legal claims. Cui, Chen and Homelife may well consider seeking to consolidate this proceeding with CV-19-00613914.
[60] In my view, this is an appropriate matter for partial summary judgment in accordance with the test set out in Malik.
[61] As there is no genuine issue requiring a trial with respect to the counterclaim against Country Wide and the claim against its Brokers, and this is an appropriate matter for partial summary judgment, partial summary judgment is granted and the counterclaim against Country Wide and the claims against Country Wide’s Brokers are dismissed.
Costs
[62] Country Wide seeks costs on a partial indemnity basis in the sum of $27,824.09, inclusive of disbursements and HST in accordance with its Costs Outline which is posted to CaseLines.
[63] If Cui disagrees with this submission, then she has ten business days within which to deliver her Costs Outline and written submissions not to exceed two typed double-spaced pages. She must deliver her Costs Outline and her written submissions to the lawyer for Country Wide Homes and to my judicial assistant by email.
[64] I will release my decision on costs thereafter.
Justice S. Vella
Date: June 8, 2022
COURT FILE NO.: CV-19-00620590-0000
DATE: 20220608
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Country Wide Homes Upper Thornhill Estates Inc.
Plaintiff
– and –
Qi Cui
Defendant
AND
Qi Cui
Plaintiff by Counterclaim
– and –
Country Wide Homes Upper Thornhill Estates Inc., Your Advocates Reality Inc., Riccardo Del Rosso, David Crudele, Homelife New World Realty Inc., Jie Chen, John Doe and Jane Doe
Defendants by Counterclaim
REASONS FOR JUDGMENT
VELLA J.
Released: June 8, 2022